The iPhone maker is reportedly developing an alternative to the OLED screen it currently uses
Shares of Universal Display Corporation (NASDAQ;OLED) have plunged 14.8% to trade at $105.70, after Bloomberg reported Apple Inc. (NASDAQ:AAPL) has been developing its own MicroLED screens -- a thinner and brighter option than the OLED displays the iPhone maker currently uses, and one that requires less battery power. Today's downside only exacerbates OLED stock's recent slide, with the shares now trading below a key technical level.
Specifically, since topping out at a record high of $209 back on Jan. 19, the shares of the Apple supplier have shed almost half their value. And while a late-February earnings-induced bear gap sent OLED tumbling below its 200-day moving average, today's drop has the security south of $109.50 -- a 61.8% Fibonacci retracement of its 2016 lows and 2018 highs, and a region that served as a floor last May through August.
In addition to fundamental headwinds, the stock has also been hit by stiff selling pressure from shorts. Although Universal Display is on the short-sale restricted list today, short interest shot 56.7% higher in the two most recent reporting periods to 4.84 million shares -- the most since last March. Given the equity's downtrend, it's not likely these bears are going to disturb their winning bets any time soon.
Analysts, on the other hand, have room to lower their outlooks on the struggling security. Four brokerages currently maintain a "buy" or better rating, compared to four "holds," and not a single "sell." Plus, the average 12-month price target of $181.67 stands at a 70.3% premium to OLED stock's current perch.